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Think your smartphone is expensive? Just you wait (The 3:59, Ep. 437)

2018-08-06
137 of the 359 podcast on BVG and we're starting late because Ben's fault but before we get to that I just want to mention that today the show is being sponsored once again by USB technology the USB implementers forum reminds consumers that the USB if' logos are displayed on certified USB products so the next time you're shopping for a reliable USB charger cable or device make sure to look for the logos more information can be found at enabling USB org and here your hosts the late and great Ben Fox Rubin and Roger Chang whoa great well we're late we are tardy five minutes thanks Ben what's five minutes for a four minute podcast everything and everything in the podcast well happy Monday everyone like they'll join us we've got as always a busy show when we're talking about a nice break down and wide at thousand dollar iPhone X really just iPhone 10 is really just the start of pricier phones we'll be talking about t-mobile back in the news with the cheaper plans which is kind of bucking the trend those are the carriers that are introducing more expensive plans and lastly we wanted to give a shout out to a great story by Katie Collins on a bootcamp that's designed to reform teenage hackers this program out in the UK so with that you have any questions leave it in the comments section right will forgot the best I will get to them in 3 minutes and 59 seconds stick around we'll see in the chat and 3 minutes and 59 seconds from 3 to welcome to the 359 I'm dr. Chang I'm Ben Fox ribbon did you think the thousand dollar iPhone 10 was pricey I'll get ready open your wall it's even wider that's according to our own Jessica Dole Court who broke down why iphone prices are just getting higher they're just going up and Samsung and yeah oneplus this isn't just about the iPhone this is yeah exactly Samsung oneplus is probably the most egregious example of a company that started out with budget phones but ultimately the prices kept creeping up to the point where they're not really they're not no brainer option anymore right so there's an interesting distinction here particularly for this year the iPhone 10 is selling a lot better than expected yes and you know they pushed up the price and consumers responded they bought it in droves but the Samsung Galaxy S 9 Samsung made like a rare I wouldn't call it a Maat culpa but they basically said like look we were too conservative we should have added more bells and whistles so there's still a bit of a distinction going on in the market as far as that's concerned yeah the funny thing is this story's coming at a time where the rumors are pointing to Apple at least offering a bit of a price break under the next line of lineup of iPhones you know they're gonna change these around the prices aren't really gonna change too much I think there's supposed to be a maybe $100 break on what is this year's version yes still which is still like signal right in that it's like they're making you spend a little bit more to essentially introduce a larger iPhone 10 wouldn't that thousand dollar price point so they're still you know they're still gonna make you pay a thousand at one point but you have slightly cheaper options so either way I also wanted to mention too that a lot of this makes sense people upgrade their phones a lot less frequently usually it's a three or four year window as opposed to one to two years granted there are still people that upgrade every year but at the same time you can convince people to pay more money for that when it's kind of like a more mature market if you add more stuff in those are all like really specific reasons why the price would go better front-facing camera you know fingerprint sensors in display gorilla glass better gorilla glass like all that stuff starts to add up hmm t-mobile is back in the news introduced a new plan this morning t-mobile essentials which starts at $60 for one line and $30 per line for four lines essentially this works out to a $10 discount from its normal plan but it strips out things like international data Netflix hotspot capabilities so it's really a bare-bones plan and just to clarify this is an unlimited plan like the other one it is an unlimited data plan you are kept at 480p or DVD quality video streaming so it's not the high-definition stuff but there are the it definitely lacks the bells and whistles of its other core t-mobile one plan and this kind of goes against what Verizon and AT&T are doing right where they're like raising the prices if they're yeah so basically Verizon introduced a new option they didn't raise the prices but they introduced a new super expensive option 18t kind of reshuffled their plans around so they're a little pricier at the beginning and spread just outright raise their prices so everyone else was raising prices I talked with the CFO braxton car last week who t-mobile CFO who vowed that you know they wouldn't be raising prices and we go the hole they wouldn't they went they went cheaper that is how they're getting more customers it seems they're trying to find ways to get more people to jump on board by doing stuff like this sounds to be working for them at this point so as an alternative to putting sorry let me start again there's there's a program in the UK that we wanted to profile Katie Collins what to check out it's called the cyber crime in intervention workshop essentially it's a bootcamp that reforms young teenage hackers mm-hmm basically this is until term - you know putting putting this on their permanent record or put them in jail and really it's sort of designed to get identify young talent and if we put them on the right track and actually get them into a technical position in the UK which is something that's lacking right now yeah definitely all right for more of those stories check us out on CNN I'm Roger Cheng I'm Ben Fox Ruben thanks for listening I didn't realize we'd run out in time no I was like hoping to stretch out that last story because it was worth talking about it's good piece I never realized that we've run out of time no matter how many times I try I know I know I looked at it like wait did we have five oh wait we had four Brian yeah I'm just I'm just chasing the action here guys so anyways as you all know it is time to say hey send in questions and comments you hear me say this every damn week and you're probably tired of it but yeah we want to hear whatever you want to know about this stuff specifically I think there's a lot more to have with this conversation that always unfortunately gets cut short on the last story about this boot camp I personally want to hear more about that so would you guys maybe elaborate more on what Katie Colin's experience was like and yet the program really entails this sounds like kind of like a weird Sally Jessy Raphael Mike what was like we're forming bed yeah talk show kind of thing but I'm hoping that it's a little bit you do that I'm gonna go look for more questions it's definitely not that I mean it's the way the story starts out I mean there's a there's a detective it comes up and basically starts barking at these kids but ultimately it's it's not that it's you know it's almost like a it's a half it breaks down you know what the rules are for a lot of these kids who get started in hacking don't realize what is illegal so it was partly its educational kind of teaches them what the laws are but partly it's almost serves as a career fair like people will come a former like convicted hackers who now kind of working as white hat hackers show up and talk about sort the opportunities that can come if you you know if you are a if you're skilled in the cyber and are looking to kind of go legit there they're definitely career opportunity so it's right there's no career fair half like reformed boot camp type things type of type event and you know the it's fairly small scale there's only eight you know there were eight boys and attendance and parently it's happened about three times so far but you know some of the folks who organizes program sort of see it as that are alternative you know throwing them in jail yeah on top of that if you're a really successful criminal hacker especially at a young age you can imagine how there would be some pretty lucrative opportunities if you did go legit oh yeah I'm a consulting perspective from like just an IT perspective all sorts of things because like as you mentioned like the like reformed hackers like some of the adults I'm sure in the program found that you know testing systems yeah of major companies is something that a lot of them do so we're trying to find those opportunities for for these folks I was like I really after this program I mean Katie talked to one of the the mothers of the boys who was in snare or was arrested she was contemplating whether or not he needed to like finish school or if he should just start jumping into like an internship program or some sort of apprenticeship in terms of learning to become one of these security consultants because after they realized how lucrative a position could be in this field you know she's like oh well maybe maybe he doesn't even need to go to school maybe he's bored at school those things are entirely possible I know if at least one dropout from Harvard that ended up doing pretty well for me yeah yeah and he was pretty bored at school too and knew a lot about that you know goes to show you I like I finished college and look at me yes yeah you said women sitting across from me exactly do I have any questions the other stories I'm assuming most of the interest will be on our first two pieces of course yeah let's talk about prices and the problems that we're seeing in the ever not changing cellphone market Alex Mitchell says so because phones are being upgraded less often it tells manufacturers that they can change more now I see why but it's going to cause people to wait even longer that's a great point to be made that's a chicken-and-egg well yeah that's the thing like they yeah if they get more pricey you're gonna hold back and upgrading but if you're gonna hold back about doing that anyway yeah but if you're gonna hold back on upgrading if you're the manufacturer like well we've got put even more stuff in there to get you to upgrade which will drive the price even higher it's the thing is is that the manufacturer will charge what the market can bear those are just basic economics and the iPhone 10 proved that this is the price that we can charge and we could charge even more for increased storage that one is what $1200 it's more than like 20% more than $1000 it's pretty simple yeah I think the max or the the most expensive iPhone 10 is roughly $1,200 and I would probably argue that the most expensive whatever the iPhone is going to be called this year it's gonna be even more expensive than that because it's gonna be the iPhone 10 plus or whatever that's what I was trying to say during the the recording was that I think they're gonna they're actually gonna give you a slight price break and like the most expensive iPhone will still be at a thousand mm-hmm and so like the what was this year's the the update to this year's iPhone 10 or last year's iPhone 10 will be will start at $900 remind something that's I think that's what the rumor is saying that the thousands sort of the the limit that's the peak that's I read for I read that that the plus this year is going to be more expensive $1100 starting wasting they'll probably bump up the storage that's what you get with the rumors right like that you don't know and like it's very difficult to figure out with pricing with the rumor stories because that could change on a dime yeah as opposed to like the devices themselves which are currently being prototype manufactured those tend to be a little bit more accurate well I mean what were with the iPhone 10 I mean I think a lot of people were expecting what's known as a super cycle idea that like everyone was gonna go an upgrade and the fact that was $1000 probably had people waiting a little bit of see you know what what's next are holding off on making such a big purchase the Apple probably recognized that that's probably why you're gonna see some slightly cheaper alternatives right that's why there are three phone that the rumors three iPhones not not too so ways there they had three last year they did not three last year I just realized that but it's like they're they're maybe they're gonna be I five no they're gonna have three iPhone tens but I think the range of prices will be a little bit more gonna be the same really think about take a thousand you screwed up yeah you're screwed either way so wait wait wait so what you're saying is that they're going to essentially including some form of like DLC for the phone you're gonna start with the skeleton and to get it up to where it would be concern a standard smartphone it would need to like buy all the modules to go into it is EA's it sounds to me like EA is starting to run Apple but that's just none of my business no no no there's no downloadable content it's not a sob battlefield or was it battlefront situation sure sounds like it iPhone loot box there is no there'll be three different models to all look like this this last year's iPhone 10 but one's gonna be a brick what but one's gonna be a brick and it's gonna be the one that the normal consumer can afford I wouldn't go that far I totally see what you mean probably won't get the best camera it will get an LCD display instead of an OLED display but you know for most people that's that's not a huge difference and also to understand correctly where we sit on the rumors this point there's not gonna be an iPhone 9 and 9 plus right so right that older design that old exactly that old design is gonna get phased out I guess that's why I was confused that we're gonna get rid of those older ones raisa cailli yeah all right so instead of the one iPhone 10 you're gonna have three iPhone 10 or whatever the hell it called I can't wait to find all belie fonox is we spend so much time figuring sounds horrible it sounds like a Nintendo game we'll see how he says how are we allowing manufacturers to drive the prices so high I was under the impression that mass manufacturing would drive the price down not up hashtag highway robbery that's a fantastic point like usually with the you know skill of competition yeah just with the the lower pricing of components right like as you build more things are supposed to be cheaper theoretically but like that hasn't really played out part of the issue is with every new version they are introducing new technology which hasn't had time to scale and so the price that's why things are getting more expensive right there's when you're adding new components like Samsung's we bought a body or like an ip67 model waterproof waterproof yeah then like some of that stuff starts to add up and it's not it hasn't scaled yet first it's like the rumor refered next years Samsung phone is for an N display fingerprint sensor that is that's gonna be more pricey right because it's a new component right and from what from Jessica's art what she was arguing in the story was that instead of looking at it as an apples to apples comparison of the higher-end market I think she was what her claim was is that it's now turning into super high-end so you could still buy maybe some sort of I mean like maybe the high-end exists like the year ago models like you could probably still get an iPhone 10 after these new ones come out and it'll be cheaper and that'll that all exists well the rumor is that the current iPhone 10 goes away really yeah they always provide the old ones for at least a few more years I think like the third model that cheapest model is supposed to take its place oh I see okay yeah I could see that happening and look the other point is it's not just on the super premium n1 plus is a great example she she listed as this was a budget filner now it's more expensive it's not a super premium phone by any stretch but it's gone progressively more expensive year after year and that's you know that's concern like that was one sort of a like a fantastic pick because it was a cheap phone with with great specs it still has great specs but the prices the price is definitely creeped up mm-hmm send Roy says why don't people freak out more about these increasing prices I see only Sony taking a bashing with their flagship price tags going on expanding from that in similar conversations do we think that this is going to further alienate audiences is the ecosystem going to shrink are their loyalty clubs going to shut their doors and is this going to give a better opportunity for phones such as the red phone to kind of step up the red phone is like super dooper right now it's way more expensive no one's gonna buy that thing people will buy it all right it's slightly just the five people will buy it you need cargo shorts for that one because it's not gonna fit in a regular pocket the thing is dragons no look this is the fact the matter is like we value our smartphone more than pretty much anything anymore right it is our conduit to the outside world it is our camera it's our camcorder it's every right and so there's sort of this mental there's change in the mental calculations that we have on what we can justify right like ah well I could spend 800 bucks on our phone oh I do I spent all my time on that thing so the way the prices like food the pricing plans are very similar to how they used to be I get that we don't do contracts anymore but with the device payment plans it very easily hides yeah how much you're actually paying and so if you put it on a monthly basis and it's a zero interest loan essentially what is the difference - a customer between paying fifteen dollars a month and thirty dollars a month like you're not really gonna notice but you're paying twice as much no that's a fantastic point that's I've noticed when carriers introduce new phones they bill rarely they rarely or don't list the total price of the phone anymore they just say this phone could be yours for a twenty four monthly installments of for the low low price right so like that's I think that's what has made it more palatable to a lot of people that just the fact that it is yeah it's like 20 bucks it's like 2 or 3 cups of coffee what's another five dollars you know but like five dollars over the two-year or whatever yeah the two years of like the device payment contract yes you know that's more money in their pockets and Apple is hurting Apple needs your money people okay just send them the money they don't have they need to get to two trillion it's not a big enough company yet gross hey Martin says smartphones are going to be the new home PCs staying on par with the concept of the overhead price that we're all gonna start needing to pay a dog kind of evaluates on that thinking that phone should be about the price comparable to a laptop this is a day and age where you need a new phone every year to two years it used to be the phones you still last about five or so that's never gonna be the case again Timothy do says please don't tell me that in like four years the cost is gonna be about two grand for a smartphone same price as a mortgage what is the ceiling for this when you're gonna have to choose between your phone and your housing I mean like know look if you don't want to pay for it there are other options out there it's it's and we've seen it with Samsung is that Apple has always done a really good job of having such a loyal customer base that they're able to raise prices that's that's what they do with Samsung the Galaxy S nine just did not have the bells and whistles that people were hoping for it was too conservative and folks didn't buy it right so if Apple has a dud then the similar thing could happen with it it's really like it's what you'd like however many number of customers are willing to pay for it you know like the fewer people that are willing to buy it they're gonna price it lower it'll be interesting also to see what Google does with the pixel phone I mean a few years ago the their their Nexus phones were just totally beloved because they were cheap but they were great like LG made one that was pretty fantastic but with the the new pixel phones they've got they've definitely stepped up in price they're definitely on the premium to super premium category I want to see what happens with the next versions that come out in the next month or two I guess my friends that have those really liked them yeah oh so as far as like that premium pricing they've they seem to have justified it at least to the customers that I know in my own life that they're they're into it so yeah all right we're all screwed we're not screwed though I mean we kind of dug this hole ourselves you could really kind of call Apple the greatest drug dealer of all time because that's a good quote I mean because they gave us that taste right they brought out the iPhone and yes we've seen touch screens before Apple as per usual just kind of repolished it repackaged it and marketed it better they didn't innovate it so don't quote me wrong on that one but they did do the thing that kind of put it in a lot of people's pockets and then made it normalized and now that we've got it and the prices are going up whether it's corporate greed or necessary market inflation now we're all starting to make decisions about how essential is this in our lives and where do I allocate my money and can I survive without it it's a very good point that you make Brian for instance that I remember there was a famous quote from Steve Ballmer when the iPhone first came out and he said nobody's nobody's gonna be willing to pay what was it six hundred dollars I was like yeah $600 yeah nobody nobody will spend no what kind of crazy person would spend $700 on a phone and look where we are now so well I mean to be fair that first year it wasn't a blow of success they actually had to lower the price I think six or seven months into it it wasn't until they got into a contract structure and then priced the phone to $200 that people started you know really picking up on it right so once they started hiding behind the real price yeah well back then the you know the price is built into your phone plans so it was way worse because even if you kept that phone for awhile you're still playing paying the more expensive phone plan yeah I remember that that was pretty awful Steve's still not wrong though weird I mean no one's paying that much for a cell phone anymore they're not cell phones anymore that's true you're right there they're definitely more than a cell phone you're not paying for the phone capability you're paying for everything else that the phone can do right and I think that was the paradigm shift that he failed to really wrap his head around was that any that you weren't well I just him but everyone else right the one when Apple came out with their App Store then that's when things really changed right because it became more than just like a browser or music player it became anything an app developer could create mm-hmm yeah never would have thought that paradigm shift would have really happened to really I mean it's a lot to take in in such a short amount of time and yeah like from one of the questions was saying $2,000 phone a couple years from now I guess from this conversation I can see how that's not the craziest thing ever yeah I really hope we don't get to that point but it is definitely possible I don't think it's gonna get to 2,000 like anytime soon that would be I mean a 100% markup on a product in four years would be pretty outrageous all right I'm quizzing you here for a second but the Samsung Galaxy Note do you know like what the most expensive one of those is don't think go to like fifteen hundred or something no no no no I think it's it doesn't there's only rich though I think there's only like one or two tiers for the note memory lasts years now I'm like okay holy its it stumped me it's okay okay before we call it a day let's talk about hacking real quick matthew dieter asks are there teenager hackers scouted for the jobs at CIA or NSA well this is the UK program so I don't oh sorry sorry I'm slow I was multitasking okay so on the flip side quantum of Olli says is there the opposite option to this rather than taking hacker kids and trying to get into scare straight is there a school to teach how to do hacking I want to learn how to do hacking stuff I love the idea of being a hacker ooh yeah there you know what I was looking this up on Friday there there were like boot camps for folks to learn how to be a hacker but I think some of them got shut down or there's some it's not exactly the most like legal clear legal thing yeah I don't know if that was a joke but I mean there were folks who were expressing interest in that I just don't know if it's like you can I mean you can learn it's easy to do it I mean there I'm sure their boot camps online that you could participate in but I don't think there's like a physical one you can go to like career day wouldn't it be cool if there was yeah I'm like pretty sweet underground I don't know I'll write the movie later or not but it would be be fun Harry Potter for hackers there we go if that becomes an option and you need a volunteer to go participate report on you know who to call all right all right we are out of time though so thanks everybody for joining us thank you to USB for sponsoring the show today and Roger you want to take us on out yeah all right our podcast available on itunes tune in stitcher fever google play music google podcasts the amazon echo and of course cnet.com we'll see y'all tomorrow bye bye you
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